Blanket ban on FDI in Indian pharma proposed

India’s parliamentary committee has suggested a ‘blanket ban’ on Foreign Direct Investment in existing pharmaceutical companies, claiming that the policy in the sensitive sector should be dictated by public good.

The committee has emphasized that the Commerce Department take all measures to stop any further takeover or acquisition of domestic pharma units.

Singapore: An Indian parliamentary committee has suggested a ‘blanket ban' on Foreign Direct Investment (FDI) in existing pharmaceutical companies. The committee opined that the policy in the sensitive sector should be dictated by public good.

The committee has emphasized that the Commerce Department take all measures to stop any further takeover or acquisition of domestic pharma units.

"The Committee is of the considered opinion that the Government must impose a blanket ban on any FDI in brown field pharma projects," the Department Related Parliamentary Standing Committee on Commerce said in its report on ‘FDI in Pharmaceutical Sector'.

The panel that was headed by BJP member Shanta Kumar explained, "This necessity becomes more telling in view of the fact that the pharmaceutical industry is not like any other industry/business. It is one sector of the economy which has to be dictated by public good rather than foreign investments, profit and revenue."

The committee argued that FDI in brown field pharma projects would jeopardise the entire health and intellectual property framework of India in terms of access and affordability of medicines. It reiterated that FDI has failed to bring about any real change in the existing pharma R&D environment as domestic companies are still to gain the competence and capacity to achieve cutting-edge drug innovation by carrying a new compound through all stages of research up to marketing.

The report further stated that FDI in brown field pharma has encroached upon India's generics base and adversely affected the industry. It also said that collaboration between foreign and domestic pharma companies has served western markets more than the needs of the local population.